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tv   Power Lunch  CNBC  May 9, 2017 1:00pm-3:01pm EDT

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>> on the closing bell don't miss that interview with mr. iger the ceo of disney. kkr. >> long, i'll take the stand on retail. >> disney, pick your spot. >> afl, aflac, bought it. >> perfect ending. >> amazon unveiling a new echo with a touch screen. it can, by the way, be used to make video calls. alexa, are you invading my privacy? another back eye for the bruised and battered airline industry. a brawl involving spirit airway. supermodel christie burns turning her attention to health care and childbirth. she will join us live this hour. "power lunch" starts right now. ♪ and here is how your money
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is doing today. the good news it's not down much. the bad news is it's not up much either. a narrow range for stocks. still, as melissa noted, amazon as well as apple keeps surging ahead. they are both trading at record levels. believe it or not consumer stocks are your best sector today. if you own marriott, under armor mour or wynn resorts. tyler? >> brian, thankful. welcome. i'm tyler mathisen. volatility not so much. all but dried up this year. let's get straight to bob pisani at the new york stock exchange. the fear gauge hasn't been this low in a quarter century, bob. >> reporter: let's take a look at it, tyler. why is it this low? it's not that surprising. there's a couple of things happening with the vix. tamm p tampening down volatility. we have advances that are making
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markets, more hedging methodologies, more ways to buy protection out there that is tamping down the volatility. keeping rates low and essentially encouraging people to buy equities. and we have the fact that risk is lower, just look at the five big risk factors for stocks that are positive in the last couple of months. with the french elections over, the u.s. economy is improving, the fed is out of the picture. there will be two rate hikes and tax cuts are in play right across the board risk is generally lower. is it any wonder that these facts you get this kind of market, historic highs and multiyear highs in some of the other major markets. guys, back to you. >> bob, thank you very much. so let's follow up on that with a question. for about 20 years now the vix has been a good measure of risk and fear.
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has the vix gone the way of the calculator or any number of child tv stars and found itself on the scrap heap of irrelevancy. you wrote about this yesterday. that's why it caught a ride. that's why we asked to you come on the program. does the vix matter anymore? >> probably it still does matter. even things like risk parity that play on something, in this case downward momentum in volatility, i do think at some point volatility will spike. figuring out the timing is a fool's errand. it's easier if you're going to play moves in the vix to wait until you see the spike because high levels of the vix don't tend to persist. low levels of the vix can
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persist for an extended period of time. i think really, though, it's more of a coincident indicator than a forward looking indicator of impending doom. >> as bob noted and as you, yourself, noted in your note yesterday there are so many other ways now to hedge, you don't just have to buy puts or options on the s&p 500. i wonder if it's still there but it's not what it used to be. it exists but we don't need to measure it or weight it the way we used to. >> i saw a funny report out this morning on the vix from my good friend who is a bit after god in this business and he sort of joked that it's an indicator that isn't even on any of his screens. he has a technical background and it's not on his radar screen or actual screen. i think maybe the way we focus on that is an indicator when it represented something much more specific and it was more dominant as an indicator of
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volatility to your point and the point i made yesterday in this report. there are so many other ways to hedge right now. >> why is the market as calm as it has been since the election do i? our producer points out only four times have we had moves of more than 1% up or down since the election. what's overtaken it? >> i think the market obviously has done fairly well and in a calm range we have not had any significant shocks to the system. the market has digested the fact we are in a rate hiking cycle. we haven't started to get news on the shrinkage of the balance sheet that could be a volatility factor. we saw the turn in earnings occur between the second quarter and the third quarter and i think earnings season this year has been quite strong, about a 75% beat rate which is comfortably above the long-term norm. 14% earnings growth. so as it relates to the market the news has been pretty good
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and we haven't seen too much excessive optimism so that contrarian indicator in terms of sentiment as the vix as an indica indicator of complacency i think everything has worked in fafrp of the market being not only fairly strong but fairly common as well. it probably won't last. >> i have to jump in. we have some breaking news on the federal reserve with steve liesman. please listen in and we'll get your response. what have you got? >> reporter: boston federal reserve president speak iing in new york says the u.s. economy is stronger than the rest of the world. he notes that the unemployment rate is below full employment. hold on to that thought. i will come back to it. rosengren says the funds rate is still low by historical standards. he sees inflation as stable. this speech is mostly about warning about the dangers of potentially overpriced commercial real estate and he makes three points about this. one is potential reform of government sponsored enterprises, gse reform.
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they are big players in the commercial real estate world specifically multifamily. an economic downturn to hurt and higher inflation and higher interest rates. he is telling lenders as well as regulators to consider the down side risk. hard to know, he says, if these higher prices are justified. very quickly on esther george. she warns policy cannot move too gradually because, just like rosengren said, it's below the long-range rates. the fed should reduce the balance sheet this year. worth pointing out they used to be dove and hawk. they're now much closer together, a sign of really you nunanimous i amity on the board about the direction of policy. back to you. >> okay, thanks a lot, steve liesman. liz ann, let's bring that part, the headlines steve liesman was telling us about shrinking on the balance sheet and how these hawks and defenoves are finding middle ground. will that spike volatility later
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on this year? >> it's possible. if you look at the history of quantitative easing and you look at when we ended qe-1 but volatility picked up. the same thing between qe-2 and qe-3. you could argue that could be a catalyst in pickup in volatility when we get closer to year end, the time frame everybody's best guess now that we're getting from the fed that this would be probably a year end phenomenon. i wouldn't be surprised to see that as a factor. >> liz ann, we'll leave that there. liz ann sonders joining us. news alert on the bond market, three-year notes up for auction. rick santelli is tracking all the action. hey, rick. >> reporter: hi, melissa lee. this is the beginning of a big supply week, $62 billion. today's portion $24 billion three-year notes. yield at the auction 1.572. the high 1.565 which means
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higher yield, lower price. we priced out of the range. that's not good. all the other internals are actually quite average. 2.76 bid to cover. a little under 51 on indirect. 9.3 on directs. except for that pricing so it garners a "d" as in dog plus pricing is always the most important. and if the short maturity isn't going well, i can't imagine that we're going to be looking at terrific auctions on the longer end but we will wait and see. tomorrow's ten-year followed by 30s, sully, back to you. >> all right, rick, thank you. well, we are just getting started on "power lunch." still ahead the ceo of goldman sachs lloyd blankfein with our own wilford frost. plus, why hertz is hurting. a look at the two things that are slamming the car rental company in a big way. and a pie in the face and a rather, well, spirited airport brawl. the continued decline of the airline industry and humanity
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welcome back. amazon keeps on surging to record his and bringing us new toys. today they unveil something the jetsons promised us way back had in 1962. the video home phone.
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>> calling the je it tsons. >> it's the phone. i'll get it. good morning, george, dear. >> it's gloria, the cute looking one. >> i can't let her see me looking like had. i have to put on my morning mask. i'll be right there, george. >> and the details on the new echo, jetson-like device and the need to have your game face on all the time at home is deirdre bosa. >> make sure you have your game face on. make sure you're appropriately dressed. you never know who might be calling. yes, the latest edition is the echo show, the smart speaker. it will soon come with two major upgrades, the ability to send messages or make calls over the internet. put them together and get
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something like the jetson phone. it will cost you $230 and ships june 28th. amazon, now that it's deciding to compete in the virtual calling field, dominate d by microsoft skype, facebook messenger. amazon is making moves right now free alexa calling and messaging rolled out to existing he cecho echo dot devices in the u.s. as well as the alexa app for android. this is another move to drop people further into amazon's ecosystem with a new screen users will be able to do things like youtube, see security cameras and probably feel more comfortable ordering stuff on amazon.com through the echo. yesterday microsoft announced its own competitor in the smart spe speaker virtual home assistant. there's google's home which has been gaining market share since it was relessed last year. amazon, though, has had a big head start, the first echo. this is its fourth iteration.
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the first came out in 2014. it controls 70% of this market. guys? >> a follow up in a minute, deirdre. first to ylam mui. >> reporter: credit market activity, now these were investments made through cvr energy where he is a majority opener. the senators are saying that he potentially recommended personnel and policies that might have caused the prices of those credits to drop resulting in a $50 million profit for mr. icahn. mr. eicahn was named as a specil adviser to president trump to help him oversee his deregulatory push. these senators are saying that they want regulators to examine will he violated insider trading and anti-market manipulation laws. cnbc has reached out to mr.
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icahn's staff, and we will keep you posted on what we learn. >> all right, ylan mui with breaking news on karl icahn and credit for the credit industry. we'll take a short break, ponder this and come back to talk about amazon and the echo. do not worry. more on the breaking news involving mr. icahn. ahn. whether it's connecting one of the world's most innovative campuses. or bringing wifi to 65,000 fans. businesses count on communication, and communication counts on centurylink.
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welcome back here.
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regarding the breaking news ylan mui said information requested around carl icahn's trading of biofuels credit, you have to be careful. there are two companies here that may be involved because they're both controlled by carl icahn. both located at the same address. cvr refining cvrr ticker, and parent company cvr energy which is cvi. again, same location. both controlled by icahn. cvr refining is a subsidiary of cvr energy. so it's possible, melissa, they're both potentially involved. >> definitely. but specifically when it comes to what the investigation will look into, the investigation called for by eight u.s. senators, it's the gain they made associated with selling these credits, the biofield credits. analysts point out such gains they made $6.4 million associated with credits in it the latest quarter and those
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gains are extremely rare, essentially will be associated with making a bet that the government would somehow be more favorable to a cvr refinery or energy when it comes to these credits and that's how the gain was made and why this investigation -- >> go back to a long-standing battle with the epa over refining issues pertaining to this. >> because the way it works in the biofields market i think it was 2008, don't quote me on the date, the government launched a bunch of tax credits that would enable you if you blended certain biofuels like, for example, fats into heating oil number six, i know this because it's the company my father worked for at the time was engaged in this, they dump in the biofuels and you get a credit. they encouraged you -- it was a way to build up the use of biofuels, but there are regulations how much you can use, how much you can take. apparently this is what elizabeth warren and seven other democratic senators want to learn more about.
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>> mr. icahn is an informal adviser and had been lobbying the white house and administration for a review of the policy concerning these credits so it's more favorable to refining which would benefit his interests and that's perhaps what has sparked this probe announced moments ago. we'll keep an eye on cvr energy and refining. let's talk more about amazon's new echo. with us now jason del ray, senior editor at rico. this is different because it has a little video screen. what i think is most interesting not that it can show me lyrics to a song, great, that's fun, but that it can actually be a security device as well which seems like it gives amazon a greater lock on the in-home internet of things experienced. >> that's a big piece of it for sure and they want to stay ahead of google and others, microsoft with an announcement yesterday. voice, they feel, is the future of home computing. two big pieces of that, of
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computing, communication, hence the video calling feature, and commerce. this allows -- amazon is the core of everything they do but by voice there's only so much you can order without seeing it. so now they believe that you'll pull up and browse -- you may start your commerce experience by voice, your shopping experience. >> show me -- show me the choices, show me adidas sneakers. >> correct. that was a big drawback of the previous -- >> it perplexes me in part because they're coming late to a game that is already well established by face time and skype and others. and, number two, did i understand correctly that this video calling only allows you to call and speak with other people who have amazon echo devices? >> for the time being. >> for the video piece, correct. correct. >> so you have to know your counter party is hooked up that
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way. >> that seems like that's limiting for sure. the voice calling piece can also be integrated with an iphone or an android via an alexa app, but are you going to get people going to download the alexa app when they can place the calls via face time or skype? i'm not sure. i think the home intercom system a lot of people aren't talking about but is big in suburban america is a market they're going after. >> can i do that now with my alexa? >> this is so big. >> you can call your wife. >> his wings have wings. he can't even hear people in the next room. >> another little piece on this, amazon invested in a startup that makes a device that looks a lot like this to address the home intercom system. amazon now has gone out and basically built something very similar so it's another reminder. amazon doesn't have partners. they have people they see they want something from.
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they take it and go and do it themselves. that's another cautionary tale. >> so how does it work? let's say my daughter is upstairs and i'm lazy, like i'm very lazy, i'll be in the kitchen, and i intercom her and say, honey, what do you want for breakfast? do you want life or frosted mini wheats? are they recording that? do they know now, hey, this dude likes life or frosted mini wheats. >> and it will show up on his suggested purchases for amazon. >> or they pop out nof where, do you need more life or frosted mini wheats? just asking for a friend. how does this work? >> i think it's safe to assume always alexa is recording and may be storing even temporarily -- >> it's terrifying. is anybody worried about this? >> yes! that's why i don't have one. >> we were trying to get away from this in east germany. >> i've turned my life over to amazon, google and facebook already. >> you're a practical man. why are you not worried about
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it? >> i'm just not. i have other things to worry about. i was not an early adopter of the echo, but i'm a little less -- i don't think the voice recognition is as far along as it needs to be to -- of any of these devices -- to bring them to the level of nonfrustrating utility you need to have. >> i keep saying that for all the praise alexa and echo has gotten from me, from others, from everyone, it's still a frustrating experience a lot of the time. at my home we use it for music streaming, weather reports, very simple. for my kids, it's entertaining. everyone i know he with kids, it is the most popular thing in the home. i think they'll get there. they have thousands of people working on the voice recognition. google, though, i think they're
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worried. that's a reason amazon is rolling out different iterations trying to figure out which ones stick. >> you know what it helps with? fifth grade homework. alexa, what is one-third divided by one-fifth. alexa knows. >> about 1,000 of our viewers just went off. alexa play please rap. that's what it's going to do. from the runway to the delivery room christie turlington burns taking on health care joining us live in the studio to talk about what she's doing ahead. first the ultra rich are chan changing course in their investment strategy. sort of. where are they putting their money now? we will tell you next. tell you . tell you . we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster.
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hi, everybody. i'm sue herera. here is your cnbc news update this hour. philadelphia prosecutors say the amtrak engineer involved in a derailment that killed eight people and injured 200 others will not be charged. they can't prove he acted with
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conscious disregard when he accelerated the train to 106 miles an hour on a 50-mile-per-hour curve in may of 2015. teresa may campaigning in new york york. she commented on the brexit negotiations. >> we node a strong mandate to put us in a strong position in those negotiations. and every single vote will strengthen my hand in those negotiations to get the best deal for britain. >> and prince philip accompanying his wife on a visit to help celebrate its centeniary. he announced he will retire from his public duties come this it fall. that's the news update this hour. melissa, back to you. david einhorn and bill
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ackman making news yesterday. leslie picker with the ripple effects from this year's event. >> reporter: we're still seeing those effects today. resnick said it's going bankrupt. a statement to cnbc that it has ample financial flexibility to pay down debt. and core laboratories down which einhorn said he was shorting. the long picks are moving as well. he sees shares doubling by 2020. >> a company is re-examining all the things that they're doing or whether it's denied boardings. >> reporter: gun lock took aim
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at passive investing saying the tide is turning to active management. >> active management, as i said, using the mark twain quote, reports of its death have been greatly exaggerated. >> reporter: how to play that. gundlach says when markets outperform the s&p 500, so, too, does active management. he's advising investors to go long emerging markets and short the s&p. leverage that one time. >> from smart money at sohn to tiger 21 the shift into real estate. the founder of tiger 21 to discuss the move and some of the top picks in the market. michael, good to have you back. >> thank you. >> what is tiger 21? it's not exactly a fund.
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more like an investment club. >> high net worth creators, 520 people managing $50 billion of individual assets. generally entrepreneurs across north america who have created great businesses and when they sell it. a peer to peer learning network. >> so the lead said there has been a significant move in asset composition into real estate. in my notes it looks like the move is two percentage points, a quarter up to 32%. >> cumulatively it has been king and keeps getting stronger. never been above 30% before. at the same time fixed income has gone into single digits for
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the first time, historically around 15% now down to 9%. hedge funds all time low. all that money went into real estate. fixed at 21%. >> is this flows of money or is it the asset side? >> it's the asset. we see the asset change. >> it could be the appreciation. the nature of our process is a little of both but i think there's a clear expression that real estate is the preferred asset for high net worth investors. it's tangible and they can own it directly. those three things together makes it the asset of choice. >> can you extrapolate why that is? >> the members on the one hand
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if you take real estate, public equity and hedge funds, those are all equity assets. it used to be 60/40. you knew a 60/40 between debt and equity so the low cash and fixed income levels are an expression of positive. you talked about the vix. it's at an all-time low. you have to reach for equity. some of it is reaching. >> the vix has been one of our top stories. do you talk about it? what do you think about the calmness of the market? >> there's really cheap insurance and some people can buy cheap insurance. >> like what? >> by buying the vix. you'll find out if the markets tumble some smart people will say i bought cheap insurance when the vix was cheap.
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>> do you think it will tumble or are you buying it just in case it will tumble? >> always a pleasure. >> more trouble for airlines and airline passengers and quite possibly humanity. a riot broke out. hundreds -- look at that. hundreds of people became unruly when they learned spirit airlines canceled several flights. cell phone footage show security agents literally fighting with upset passengers. passengers fighting with each other, et cetera. let's bring in phil lebeau live from denver, colorado, with more. not the kind of commercial you want for your airline. >> reporter: no, no. there are a few people who got cold cocked there. video of the fight and the people waiting in line because they were thinking that they were getting on a spirit flight that had been canceled. you think you've seen long lines it's nothing compared to what they saw in ft. lauderdale last
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night. police did arrest several people after that fight there. here is a description from one of the people there about what they saw. >> get off of him! >> reporter: that's not exactly a description, more of what happened while the fight was breaking out. as we show you shares of spirit keep in mind there is a pilot dispute, a pilot labor dispute going on. the airline has taken the pilots to court, canceled about 300 flights. we've reached out to ask their take on what's happening and it if they are causing these delays and cancellations. they say the airlines pilots association it represents are not engage ed d in a job action rather they are continuing to do everything possible to help restore the company's operations which have been experiencing significant problems over the last week. guys, i think that would be an understatement. let's see if they can work this
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out. if there are more cancellations, watch out. >> do we know why the flights were canceled? was it weather related? was it equipment related? >> reporter: well, we've been told there are maintenance issues and it depends on who you talk with. the airline says it's clearly the pilots who are say iing we' not going to show up for work. the pilots are saying we're not engaged in a work stoppage. this usually works out in a relatively quick manner when an airline takes the pilots to work. they have wide latitude but at some point you would likely see a court come in and say, you're under contract or -- >> phil, there's been so much focus on the behave yorp of airline employees in recent weeks. united airline case most especially. >> right. >> any indication in this case that airline employees were involved or, you know -- >> reporter: in the fights? >> in any way or the patrons, the passengers sort of brawling and rioting?
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>> reporter: no, tyler, it's my understanding these are the people in line frustrated, irritated. look, it doesn't take much to get people to snap when they think they're going to be on a flight and it's not there or they're waiting in line for a long time. there's no indication there are any spirit employees involved. >> airlines have acted terribly but passengers are acting terribly. >> bad behavior on all sides. to our second topic, ugly, ugly day for hertz. shares are down 12%. big earnings miss. it seems like, phil, they are at the cross section of uber and falling used vehicle prices. >> reporter: the used vehicle prices is what's hitting them now and they admit they shot themselves in the foot by loading up on too many cars and sedans. it doesn't take a rocket scientist to figure out those are not in demand. it's suvs and crossovers. you combine that with low values and the airline is getting hit hard. what's concerning people on wall street and, in fact, you're hearing it from a number of analysts, is this as bad as it
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gets for hertz? morgan stanley out saying we wish we could say that the first quarter of '17 was truly a kitchen sink quarter but we just can't say that with any confidence. some metrics suggest we haven't yet seen the worst. that is not a good sign for the rental car stocks which have been under pressure for all the reasons you mentioned. >> and, phil, i know you can't see it because you're out there in denver, but this morning i tweeted out a graphic which basically shows hertz's debt to its revenue, the white bar in the middle is debt. on the left is market cap. 1,300% more debt than market cap. for hertz. they'll blame uber but, guess what, private equity and loading up on debt is a big part of the problem with hertz, correct, phil? >> reporter: i think that's part of it, yes. when you talk about the debt and falling residual car values, that makes it even worse. it adds further pressure to it.
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>> and further pressuring used car prices because they don't need all the cars because of uber. phil, thank you. >> reporter: exactly. you bet. it has been nearly two weeks, two of the best weeks of your life, since the cnbc stocks draft and one of the standout picks is, believe it or not, valeant pharmaceuticals. stock is up 20% catapulting the one and only tim seymour of "fast money." 5:00 p.m. eastern. he will join us to gloat coming up next. supermodel christie turlington burns in the house is pressuring the health care industry to do more for moms. she'll tell you why and what's wrong when "power lunch" rolls down the runway coming up. and markets continue to rise and fall... predictable is one thing you need in retirement to help protect what you've earned and ensure it lasts.
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it'that can make a worldces, of difference. expedia, everything in one place, so you can travel the world better. it's been nearly two weeks since our stock draft and we're seeing big moves and a number of our draft picks, check out shares of valeant up over 25% after an earnings beat raising their full year guidance.
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this surge resulting "fast money's" tim seymour. it is all about debt repayment and that was the exact point you made when you drafted valeant. >> first of all it's a long season, as they say. this is a company with a ton of problems, but it's really not about the equity. today they gave a guidance that actual ly they raised for 2017, 3.67 billion. it's still seven times but they cut $1.3 billion in debt. they've taken about $6 billion off their debt requirements or repayment between 2018 and 2020 which is substantial because it removes a lot of fear around forced divestitures around profitable businesses. >> you mentioned it's a long slog and it is until february when we decide who wins and we calculate that. so what's your biggest concern
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when it comes to now to february especially when the rest of the debt is not repaid until 2018? >> well, this is still a company that has patent -- no new major launches and even in this last quarter. let's see what happens to the degradation of their revenue stream. my view is that, first of all, from a traders' perspective, i own calls because i think that's the best way to play it. this is about rolling up your calls and taking money out on a day like today. you have to watch the core business but continue to watch what's going on with their debt and to what extent they're able to continue to make -- look, this is free cash flow positive. that's impressive. >> tim, thanks for phoning in. i'll see you at 5:00. tim seymour.
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>> what time is that again? >> 5:00 p.m. eastern time. >> from supermodel to activist christie turlington burns is digging in her heels to campaign for the better treatment of mothers worldwide. it is through the good work of her nonprofit organization called every mother counts. her first time ever on cnbc which means we have to be nice. how is it in this day and age with all the modern medicine, even in development countries, that 300,000 women die as a result of childbirth every year? >> it's pretty shocking, right? i was shocked to find this is it continuing to be a problem and that these numbers are steady, every year 303,000 at least here in the united states, one of 13 countries in the world with a rising mortality rate. >> where do we rank? this is pathetic. >> 46th. >> how are we -- we always talk
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about -- >> not maternal mortality. >> the greatest health care system, it's the most expensive, it's the greatest. i hear those stats it makes me wonder what the hell is going on. >> there's a number of things. i would say the rise of chronic illness that are changing the outcomes at birth significantly. diabetes, obesity, hypertensive disorders are on the rise in our country and in it other emerging markets around the world that you won't find in a developing country per se. but the causes are the same. postpartum hemorrhage, infection, obstructed labor where it's necessary to have c-section. in the u.s. we do too many c-sections and that's contributing to the increase in maternal death. >> is it that people don't seek the prenatal care and they're not treated for these conditions
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prior to giving birth and that complicates everything? >> absolutely. if we're going to start anywhere it would be making sure everyone has access to prenatal care which is going to be a big problem in the current health care conundrum. if we can have a woman in active care and with a relationship with a provider more likely than not her complications, if she has any, will be seen and recognized and they will be able to be addressed. >> let me ask, we rank 43rd, you said? >> 46th. >> even worse. in maternal mortality. who are the people who are dying? where do they live? how wealthy are they? >> it's a range. i would say the majority are obviously low-income women, women who don't have access to insurance, women who fall through the cracks, women who may have had children previously and think, oh, i've done this before. i'll be fine. you just see a range of inconsistent health care throughout her reproductive
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years. that's the contributing thing. women of color. i would say women -- african-american women are four times more likely to die from a pregnancy related complication. latino women two times as likely. and that's not always socioeconomic or education based. this is something that we just need to look more closely at to understand better what the data tells us. >> you could have done a lot of things with your career and your name. why this issue? obviously it's an important one. but how have you gotten deeper involved in this because of the connections you've made in business which matters in some of your corporate backers. >> i had a complication after delivering my daughter and i was perfectly healthy. i was perfectly healthy going into it. and i had a complication that could not have been recognized in a prenatal checkup. and because of that experience i learned about these staggering statistics around the world. at that time the estimates were even worse. it was more than half a million girls and women. and it's girls and women. so girls aged 15 to 19 could be
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the most vulnerable age groups outside of the developing world. >> having babies later as we have, is this -- asking for a friend -- has it played a role as well? >> i would say that it's one of the things. >> it's still -- it's too soon to know the long-term impact of invite troe. there are certainly correlations between complications that would arise because of those kind of interference and treatments. against, if you have means and access to care, you probably can survive a complications no matter what it has. however it's the people that don't have access to the basic care or emergency on stick rick care which are the ones that are going to suffer. >> are you hopeful there are solutions found in the healthcare package? >> i hope -- there's always room to improve. where we were going with aca was
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in the right direction in terms of the coverage for prenatal care. i think we're farther away from that now and i hope that more women will be a part of the conversation as it moves to the next place of deciding how it will play out. because i think in order for it to improve you need women and mothers at the table to help decide. >> have you spoke to ivanka trump? >> i have met her. she knows then an area of condition for me. whether it's a priority for her is yet to be seen. she is a mother, i did plea on behalf of the world's mother this is something she should be thinking about? >> let me ask one question, my wife wrote about it, do you think most mothers are think they are good mothers? >> i think women and motheres are hard on themselves. there's a lot of stake and you want to be the best mother you can be and there are many other lives that depend on the equal of your life and your health and
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that's why it's so important i think to mick sure this is prioritized because if we take care of our mothers, more likely will the children and the families thrive because of that. >> i agree with you. i think women beat themselves up -- >> we make it impossible. corporate america makes it impossible will not just mothers but fathers want to stay home. child care is so expensive after they do the math in child care a lot of people look at i'm going to come out with zero i should stay at home with my own kid. that's something we got to fix in this country. >> absolutely. we look at that in our corporate partners we want to know they have policies that are making sure they look after women and mother that is work for the companies. i think that's important. you can't talk being thing like this if you're not going all the way across. yeah. >> christy turlington burns great to have you on.
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next time be tougher. >> thank you. >> street talk is next. we may ask christy to stick around and do it.
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time for street talks the
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stocks you need to know about. first stock yelp. earning out with the close yesterday. yelp is among the lowest performs in the internet sector. 4%. softness keep people nominee reoccurring only back .6% of the midpoint. yelp has a history of conservative guidance. it's okay. >> last stock, spirit arrow systems. s rp, uv s out defending the stock. look uv s up grades from a buyer to a neutral. the buyer concern of the price negotiation for boeing. david stroud says the risks reward is favorable. s pr may not be as much of a loser as some think. he stick with the $63 charge. it's up from where it was this
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morning. >> all right tyler. >> still to come we're minutes away from our interview with goldman sachs. what will bob barger the ceo say about espn and cord cutting. the return of american idle. "power lunch" will be back. " wi. stay with me, mr. parker. " wi. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most.
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. welcome back. to the second our of "power lunch" i'm tyler mathisen and here's what's on the menu. disney on the clock we're counting down to earnings after the bell. colt cut of espn's, the tern of "american idol" and so much ahead for disney. ceo of gold man zacks. and he's not only the cofounder of the home depp and the owner of atlanta falcons he's the man at the hill of expanding golf equipment retail empire. author blank will join us live.
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another jam back of "power lunch" is teed up and ready to go. >> let's check out your markets right now. looks quiet once again, although competent be once again hit new all-time highs on the nasdaq with s&p, as for individual movers, after reporting strong earnings, dc properties helped by the snaug ration and the big women's march a couple week after. pandora stocks is in the lows, it could sell itself in the next 30 days. if it does it'll have to pay kkr $15 million fee. >> we are counting down to the pig earning report from disney just after the bell. julia we'll talk to disney ceo bob eighter. julia joins us now. hi julia.
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>> the success of the movie them parks can become challenges of the division. the revenue, $13.4 billion and earnings per share of a dollar with 43 cent. both 3.5% if the last year's quarter. an update on the impact from digital and bundle that include espn's. disney shares still down 7% from 2015, the decline started in ceo bob iger sparked concern about espn's. the impact of cord cutting and skinny bundle on media companies. we see the upside on espn's saying espn's distribution growth rate can double from fiscal 2016 levels but fiscal 2020. turning from an overhang to an
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overstriver. some analyst are still concern. security raised its film smoits dow to "beauty and the beast" but raise t the -- i'll be over at disney and report those earnings after the bell and we'll have the sit down with bob iger for the bref. tyler over to you. >> julia thank you very much. >> what do nerts wants to hear from disney? cole smeed is a disney shareholder with capital manager, roughly 4% of his portfolio. doug let me start with you, what would you like to see out of the numbers? are you embrace ring for anything or anticipating something good? >> we heard from most of disney's peers i think we have a good idea what we're going to see on the network side. the revenues will probably be more soft and have -- on the
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subside. buoyty and the beast was a massive run away hit from them, one of a string of hits that continue to be good. i don't think it's what they say about the core that just finished but what the forward outlook it that bob provide today. >> cole what you expecting or hoping for? >> to follow what doug said from a quarterly standpoint we're likely to get a lot of same news we've been getting. just the same frustration with the media side. investors have to go back eight years ago and remember the move studio was a dog, or the redheaded stepchild in disney's mix. here we are now in a situation where it's the love child of wall street and they treat espn's poorly. as long as the customers say attached through yaepz like it did in the past as shareholders we're going to be fine. what's a 30-year-old who likes
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sports today going to look like versus when they're 50? that's not a short-term thing, disney's a great business. my grandchildren's grandchildren will love it to by the way. >> would you be stunned cole, as a shareholder to see disney spin off espn's or maybe spin off espn's to abc and some other competitor? >> it's a great question tyler, especially in light of fcc environment we're moving into right now. we have mr. pi who's the fcc chairman. the question of the parent -- you know the abc's, the nbc's and cvs is going after their affiliates. if they consolidate they don't have to do my heckling with affiliates while they're negotiating with the come cost of the world. if there's a huge opportunity they want to do that they'll take us back to 1988. it looks very -- that's going to be the jurn price par of their business. cat the end of the day the meet
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yanetwork which the business is apart that's half of media income. what division to you want bob ige tore lie out when it comes to his vision for espn's and how it kbats viber losses? we heard from his peers but when 700,000 subscribers losses were elised in the cable and satellite business every stock went down across the board in the sector? >> the worry about espn's has been always been because they are the most expensive network in the bundle that people who are that interested in sports. the "discovery" judiscovery thi he envision a $10 bundle with supports and if that happened that could be a big thing for espn's. i find it hard to be that disney would do that because espn's is
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a huge cash cow. i think that riddle that bob has to solve is to figure out how to provide another version of espn that he can sell directly to consumers that can maybe address multiple price points for people who have different level of interest in sports can get into the product and that way potentially capture for values for under the demand curve and what they're getting now is basically a single price product. >> very quick question. doug my notes say you have a $95 price target, that means you must think this stock is way over value? >> i think it's richly valued. disney's a great company and it's tough to say it's really overvalued given the strength of ip there. there's a situation in the part of the business side t about as good as it's going to get. hard to see how they're going to improve on that. >> all right so cole, final thought. where do you see the stock in a
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year? it's at 111 right now. >> every year something say the stock is unvalued they lock like later and look like a total fool. we don't want to be in that kafrm. >> let's get to wilford frost in chicago. wolf take it away. >> hey there melissa thank you very much. as you been i'm here with the chairman and ceo of goldman sachs lloyd blooing fien. thanks for being here. >> thank you for having me. >> yesterday we had warren buffet on and he said he did not think donald trump has yet to have much effect on the company. do you agree with that? >> i think he's has one effect. he's raised expectations that there'll be positive change towards -- if he successful there'll be a lot of it. if he's john successful there'll be a left leg bit of it but there's not going to be none of it and it doesn't feel like it's
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going bark wards as it might have. aisle talking strictly about stimulus here, if he hadn't got elected. and instead of the current program, you had a program that call for more leglation to higher taxes and both platforms call for more infrastructure spending. certainly the platform -- trump's platform is -- on those grounds so it will be more or less successful so there's got to be some -- getting that -- >> and that view of delivering 3% real gdp growth for sustained period is that acheebl in your eyes? >> i'm not going to contradict but i think the economy could grow at a faster rate that it's growing. i think the expectation is going to be plus or minus around 2%. so i don't know whether that's 2.5% is the goal or 3% but i'm not going to fight with that. >> if we switch from the economy to the mark, evaluations real t.v.ly full at the moment,
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volatility very very allow. do you think -- >> every time i get accustomed to low volatility like we are at the greenspan area, and we think we have all the leads under control and there's no risks in the world and the world is washed with low quiddity that pounces on everything in the market and things go in, something e are you entering your plea of true or not true freely and voluntarily to remind us that that idea that anybody's in control of anything is human being rous and the world doesn't perform like that for long periods of time. so i don't know what brings us out, but my expectation is that this is not a normal resting state. >> and i mean you mentioned the great esteban area, you been through lots of cycle. r there warning signs that you look at the moment that are frightening to you or not? >> not as many warning signs as will be available to me in the
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minds sight and that's a problem. i will swear to you and i really think i saw them. i would say in prospect i'm much better at predicting the past than the future. i would say if i had to look for anything specifically, i would say asset prices aren't high but a lot of assets like real estate some have allowed up and some have come down. credit is very fight so i would say in distressed credit people certain for yield. i would say maybe in the hind sight it will preponderanceappe will move into equity. we're looking at a yield in dividends and you'll associate yield with fixed income and not equity. in returns people are putting money into equity because -- higher than the interest that
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some of the companies are playing. the low volatility itself might be a kind of bubble of confidence but we don't know until -- until -- until we know. my only expectation, which i never rely on -- look i always differentiate forecasting what do you think will happen from the exercise of risk management. in risks management i don't care what anybody think or what i think, i'm preparing for contingencies. on the other hand in our trading business and trying to ape flows and what clients want to publish there i have to try to guess the future and where thing are going. those are two different exercises. my own view from a marketing position point of view is we're muddling through, a lot can go wrong but i think the base case that things are going right. >> in terms of preparing, the
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banking sector is far more prepared than it use to be. do you think the u.s. banking sector is overcaptialized at the moment? >> i do. the system had a very big trauma and reledgelated very quickly there was a lot of demand for it. the issue was what should we do should we regulate capital, should we prepare for these thing not working and have tests on how people would respond in case of a crises or a resolution, or a call for resolution. there's even a test, there's a regulatory overlay that tries to divide your state of mind, why you're in the position and the vocal rule, which of these should we do, let's do all of them. the effect of layer on layer on layer is every increments at every layer provide less incremental safety and soundness
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but more of a burden on risk takes and doing the things that a financial system is suppose to publish like taking on certain risks so companies and individualing can deploy the capital and without fear of a certain kind of risks baipgs would take on from them. and so now that the trauma -- we should learn the real lessons of the past but i think some of the -- and i'll say overreaction, i know people will be critical of that statement, but you can always draw out incremental safety but it only comes at a cost. i think thou that distance from the traumatic events people have to take account of the cost. >> if capital rules were relaxed what would you do with that capital? >> some of it would be reinvested, some might go back to shareholders but i don't think there's that bigger of economy with that public view and policy were the right thing
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to do. if i saw a ways in investing in our business and eastern a higher turn on that i should investigate that money. if i don't see it and return it to my investors who do they do, they take that money and reinvest it in place where is they think would be a higher turn. if i don't exercise that judgment for my shareholders it's they're money let them exercise it. i know some people will say if you allow people to return some money that's overseas return that to them -- give it to the companies or forgive some tax that might otherwise be due, they'll obviously return it to their share hourlds. i say yeah. and the shareholders will invest it where they think is the highest and that's a positive effect for the world. >> did crop trading itself cause the financial crises? >> no it didn't. but i can understand -- when you
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go out and reregulate the system i don't think you should be stopped and address those issues that were the precise cause in financial crises. the cause of the financial crises was a calamity in the real estate market. 90% of the losses were contribute bl to real estate whether in the form of derivatives or cash or ceos it was a real estate bubble that collapsed. does it mean -- i can understand -- i am sympathetic to the idea that certain institutions that get certain benefits in terms of being able to acquire some kind of financing on a guaranteed base shouldn't employ that for strictly propry tir purposes. but they should be able to be principals because mark making is a very important public function of companies like ours and if we don't do that, the drop in low quiddity will not
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allow other peoples to accomplish their objective which is beneficial for the financial markets. so. >> much for effective -- >> so it should be that much more flexibility. >> in terms of wring fencing coming back do you think commercial banks should separated? >> you know, i think the eggs are out of the shell and on omelet has been made. this is been point of impacted out shlgs we are probably the large bank that's best positioned for a return to glass eagle because we're not a universal bank. we have some of the functions but minor in relation to our banks. so our a adaptation to that will be easy. that said, with that kind of remoteness and representative, i can say in 2017 it's ready hard to -- so that one institution
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could lend money and complete a loan and another institution can underwrite a bond for the company which may be the economic equivalent, but that's a security. >> right. >> and so i think those issues have -- i think the world has moved on. and by the way, all financial institutions around the world have dropped that so the u.s. would be kind of an island in the world and i don't think it make as much sense now, but i can understand the idea that certain of the functionality related to security has created a different set of risks than traditional lending. traditional lending is often the risksier activity. when you give money to your clients as we do you sit there and hope they pay you back. when you have a security on your book and you get nervous about the credit underlying that security, you could sell that security to the market and li
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liquefy your position. it's kind of ironic and the crises it was kind of the bang-like activity that generated the losses. >> we'll move on to your q-1 earnings, big misand trading what would that come don to? >> big miss and trading are commodity business and our currency business. we're looking at all those businesses. the quarter before we outperformed in our trading business, this quarter we underperformed. i'm happy to report we're human. >> it wasn't a volume thing it was a positional thing that you got wrong? >> you know, it's -- whether you look it we -- you know the evidence that we have is that we -- in the mark in which other people performed better. now something that has is attributed to business mick, our client mix is a little different. we tend to deal with more coming from our banking investment
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security roots. we tend to deal with more money manager and assets manager tend to be a higher proportion for our base hedge funds, we know there's distress in that community. we tend not to have corporate management services, we tend to have -- we tend to perform fewer services for cash management, so our relationship to corporate tends to be a little less. that's something that had done very very well during that because corporate balance sheets are marsh and low quitty, that gets invested. that's a bit of difference in our footprint. it's something that cause us to even out that footprint and you know, we -- we'll address these issues, we always have. >> i want to move on and talk a bit about gary if i may. when he was your number two did he challenge you regularly and
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do you think he'll be doing that now to president trump? >> i could confirm to you that is a core of gary's personality which i've witnessed for of the 27 years that our careers overlap that he's a challenging person, all terrific. he has great ideas, he's the person in my life who said things that i've thought to myself, gee i wish i'd thought of that. >> right. >> he's very good and i know i could just -- i'm not that in touch but i can see the relationship that he has with the president. i can tell that the president is right in bestouing trust on him. >> have you spoken to gary since he left? >> i have. >> how many times. >> not a lot. >> what was your view on the fact that so many, steve mnuchin and others have ended up in the
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administration? >> well, first my blink reaction is a sense of pride that again another person who wasn't necessarily friending toward our institution in his campaign recognize the talent of these people. i don't think he's going out of his way to hire goldman sachs alumni and current employees. i think he was looking for good people and guess what he found them in our firm. so i feel pride at that. it generates a lot of in convenience for us, everyone we'll undully appear hencive. in the order in and near course of my life we're underwriter of debt, and a financial institution i would normally be regularly engaged with the principle economic advisers and the treasury's secretary and administration. little appear hencive about it because of the fear it might look. on the one case i'm proud, in thor case it creates some in convenience to us because it
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becomes a party of news, how many times -- nobody's asked me how many times i've talk to jack and by the way identify talked to him a few times. >> we had a lot of challenges particularly in europe, some election haves gone well for markets, others haven't. when you look at the channels that places yeek europe and asia face are you really pleased that the company you run in the united states and headquarters here and the legal constitutional protection you have in the united states? >> look we're an american-oh ridge nated firm. our business and investors are distributed around the world. if you look in the trading rooms it's united nation. we're a global firm. the u.s. there's a huge advantage being based in the u.s., it has a big balance
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sheet. to the extent the banks were in distres nobody thought it was going to blow up the balance sheet in the united states, it was never an issue. it was always the willingness of the united states and what they'd be willing to do, not what they had the capacity to do as it was in other places. and in general, the tone and the nature of the united states and the culture of the country is to get on with things and do thing quickly. look, you know it was pretty stressful for us dealing in the aftermath of the financial crises but the united states dealt with that aggressively. firms were recapitalized. some aspect and regulation and legislation but largely they were good and necessary and done right away. so we got on with thing. the firm -- the regulation was done, we were able to adjust to it quickly, we were very well off. the u.s. firms are very well capitalized. some of the firms in europe are
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half a cycle behind and are recapitalized now. i have to give credit to the official sector in the u.s. for accomplishing that objective very very early in the process. it looked crazy from a lot of people watching overseas but the u.s. got it done. >> i want to ask you about your health. if 2015 you had lymphomay. are you back to full health, to your best you think? >> i feel good. i have to plot it to the decline from getting old r than i was when i first got sick. i think i'm okay, i have slight residual that reminds free from time to time, some numbness here in request there. there's a little bit over overhang you worry about thing coming back but statisticsly i'm cured, i feel pretty good. i don't think about it until i get asked the question. so thank you for that. >> well i apologize.
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>> no no no. >> it's -- >> >> they're game. and your protective for coming here to our conference. >> it's a pleasure. you've been ceo for 11 years do you have like you get better every single year from the experience and another decade to come? >> i feel i get older. i feel -- i feel obviously you feel comfortable. i'm not sure whether comfort is good or bad because i think freshness and newness you have diskt perspectives. i think there's values to experience, i've seen a lot of stuff. and there's also value to nervous energy and the freshness and newness that one brings and one has to weigh those thing against each other. so i'd say it's great that i'm about to start my 12th year because i started basically, i got the call from hank that he was going into the government
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memorial day weekend in 2006 as i get ready for the start of my 12th year i think there's virtue to my long ten your and would would have to say it's not entirely virtuuously but i feel good. >> and you mentioned gary use to challenge you and didn't think about thing you didn't think of. does goldman sachs mis-gary? >> oh sure. and we have other people who are also terrific who aren't gary and gary isn't them. and gary wasn't me and i wasn't gary. there were things that gary did that got everybody who's still there wishes he was doing, but guys who stepped up in his job wouldn't be able to do it if gary was there. life moves on it's a very gray line. i'm sure people wringing their hands saying what's going to happen to goldman sachs.
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i'm not thinking that with people who are going to be around. >> lloyd it's been a pleasure speaking with you today. >> it's my pleasure wolf. >> you're too kind. lloyd blankfein. send it back to headquarters. >> snek up reactions to cnbc's -- do not go anywhere. "power lunch" is back in two. only t-mobile one gives you unlimited data with taxes and fees included. that'll save you hundreds. get two lines of unlimited data for a hundred dollars. that's right. two lines. a hundred bucks. all in. and now, the brand new samsung galaxy s8 is here. so what are you waiting for? get the new galaxy s8. plus get 2 lines of unlimted data for a hundred bucks. taxes and fees included. only at t-mobile.
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welcome back. before the break wilford frost spoke to lloyd blaine blankfein. >> woods great to have you with us. wolf asked about the trading in the first quarter and lloyd said something to the fact of their positioning, are you getting the sense that was the reason why the miss and what are you seeing so far from your advantage upon in the second quarter? >> well as mr. blankfein says it's a bad quarter they're human. they have these kind of quarters it happened 2013 and last quarter.
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the company to be honest isn't trans pattern enough to pinpoint what happened. there's a railroad of rebounding from quarters like that and that's why we think after bad quarter's usually a good time to buy goldman sachs stocks. >> so when blankfein says we're fix that you take him at his word? >> yeah. there's a history with goldman sachs. it doesn't look anything system ik. trazing naturally have those bumps in the road and that happen last quarter. >> discussed the deregulation that could come under trump administration. take a listen to what he had to say. >> the system had a very big trauma and we ledgelated very quickly, there was a lot of demand for it. the issue was what should we do, should we regulate cap captal. the factor on layer on layer is
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every increment and every layer provide less incremental savings in soundness but more of a burden on risk taking and going the very things that a financial system is suppose to accomplish. >> you know fred, part of the thesis that a lot of bank investors have is this notion of deregulation. when you look at the possible tail winds for this sector how does deregulation rank when it comes to rising interest rates, economic growth around the world and deregulation, where does that fall? >> well global deflation is the number one thing to drive the stock. because higher rates is whack help out goldman sachs. deregulation, a lighter rogeliotory footprint on these companies including being able to return for captal is a supporting piece of that argue. the real critical for these stocks is global inflation
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trade. >> what about deregulation on one handing the possible re -- between commercial banking which he addressed and said we would kind of be the outwire if we one back to that kind of regime. he said if that happened our company would be ber off -- not exactly, would be better position than many to weather it. >> item sure. i think this whole issue was pretty rhetorical rather than right la reality. the united states wants to create public banks it will be huge, i don't think that's where the country's going to go. he is correct, if we split the two in half the companies affected are the true universal banks and traditional lending. that's jrk p morgan bank of america and city group.
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morgan stanley han done that deep so there will be no deep affect on the business model. >> thank you. we're under less than 90 minutes away from the closing bell on wall street and stocks are doing what they've done so much and that is not much. we got 24 points right now but we get a big numbers earning after the dell, disney they'll report their numbers after the bell. the oil trade set to close for the day and oil is down but only 43 christian. just 1%. >> we're going to be sort of mid-40s to mid-50s. the healthcare bill is now in the hands of the senate. mitch mcconnell speaking in d.c. today. let's check with kayla. >> the senate come after the senate majority leader convene for the second time with a
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member of 13 senators to discuss a frame work going forward on how the senate will discuss healthcare now that it's out of the house. that meeting was followed by a policy luncheon and after this this was stated. cthis is a big issue as you all know. we're all involved in discussing way forward and we'll address the issue in the coming weeks. >> in the coming weeks so given the senate a bit of time to move forward on this issue which has become very complicated. they're trying to tack it in a piecemeal fashion. today's meeting discussed just medicaid and how the senate will approach with the house and its bill had allocated for $880 billion cut to mexico which the ceo said over ten years would leave 14 million fewer people with insurance. after the meeting ended senators had a different approach to what was discussed and how they feel about the issue.
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one senator said he didn't believe that the house bill had any cuts in it. he said if you look at what medicaid was slated to spend before obama went into effect it's not a cut at all. on the flip said -- want to make sure there is a soft landing and glide path for states that have expanded medicaid. there's still a lot of issues to work out. they're coming from very different viewpoints. one viewpoints is not present at these meetings is women. senator shelly moore capt tall of west virginia was present. >> all right kayla in washington. thank. we'll see you soon. coming up another big exclusive interview you'll only see right here on "power lunch."
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home depot ar author blank will join us. stick around. stick around. way . it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪
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. this way be breaking news but what happens in washington does impact main street
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especially all of the small business owners out there. the national federation business index falling again, maybe perhaps over frustration that washington hasn't gotten anything done on taxes and health. katie rogers join us with more. >> that's true for the third month in a row slow business did take a slow dip. the monthly reed on main street sentiment fell .2 points. expectations for business conditions fell eight points, that predictcribbed most of thee this month. pulling the bill on the american healthcare act for a vote back in march. now that the house has pass it had reform bill it's possible -- but it remains to be seen how healthcare is addressed in the senate. that being said, this is the sixth month for historically high optimism the group hadn't
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seen that since 1983. the number of firms increasing employment both good signs however finding skill labor seems to be a challenge for small business owners. taxes jumped to the top of the list of concerns in april with 21% listing as their single most important problem. government regulations and retape had taken the number one spot on that list. it's interesting to see taxes move to the top spot. i thought the drop would have been bigger this month. >> let me cut you off. forget about the nfiv. you were on the road all last week going from town to town, so forget about these indexes you actually spoke to people. >> real people. >> real human beings called reporting. what did you learn? >> people are generally feeling optimistic. i think deregulation -- >> are they doing anything though? >> no one that i talked to said
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i'm hiring or ex panned with expectation of the people who are partnering on a profit. that you are not exactly the small businessman owner, they're feeling more on misk than i would say your small business owners but the people i talk to they feel good about their business prospects. i think tax reform, deregulation and potentially healthcare reform coming down the pipe could be good for small business. they want to see action from washington. >> before they do anything? >> yeah before they invest in hire makes sense. >> getting on the road talking to real people -- >> wait that was my high school car chevy calf here did you know that. >> real news. thank you kate. we're hearing a lot become the vics. does vics matter that much, if it does what is it telling us
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the league on the index as vics better known as the fear gauge sitting at a ten year low
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today. what is it telling us? does it matter anymore. craig johnson, jake ill start with you. not to take anything away from the complete coverage of the vics. how much are you watching it? is it still relate in today's etf world? >> it's important to be on, the vics is certainly relevant in today's world. i've heard a lot of people say the vics is dead -- >> mostly me. >> it's doing what it's meant to be doing. it's reflective of the market volatility that we see in the markets. i'd make two points, one, we have a historically low level of realized vol tlt in the markets. in fact, q-1 was the lowest on record since 1965. the second, you've had an excessive amount of volatility sellers in the market. look at the growth of shares
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which are the shore vile etfs. risks premium strategies, that's sell volatility. as long as that realized agreement from realized volatility you're going to have sales in the market. that's creating very low levels of vics. >> craig johnson listen, i can understand why the vics is at ten year lows, i understand jake's point but with everything going on isn't the vics suppose to semi-predict what's going on instead of reflecting what we know? >> brian, there's no question that the vics is playing the limbo game and investors are asking how low is it going to go. if the levels were at right now, you can go look back in time, we've gotten very very low levels in the past. ear early 1990s. in the mid-2000s we saw vics had
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low levels and stayed there for a long time. if you go back and look at the last nine trading days you had a trading range of -- so i'm not surprised it's this low. in our research looking back if time, what we've found is our last 12 periods, last nine times the vics is low 12. we've seen the average higher with an average percent of 12. vics is not a better gaj for picking stops but bottoms. >> as we know we're not anywhere near bottom. so craig johnson thank you very much. jake, we appreciate that thank you. for more trading nation head to our website tradingnationcnbc.com. tyler. >> the coach of the atlanta falcons join us live next.
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welcome back. pga tour announcing a ten year tour for the fedex cup, expecting to increase significantly, the starving gaffers will feed their families. yesterday on "power lunch," nbc sports said professional golf is in its best condition ever, as he said. the pga tour superstore has plans to open a 30th location in jacksonville, florida, but all this in the middle of a tough slog for brick and mortar retail. golf going through a revival, joining us now for a power lunch exclusive is arthur blank, founded a little home goods shop called the home depot and owners the atlanta fall phenomenons. arthur, good to see you again. >> as well as the united soccer franchise. >> you are good for a startup, by the way, in soccer. >> we are. >> amazing. >> well, i, you know, really, really has been amazing.
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espn has now said this is a greatest launch of a soccer franchise in the history of the league. the league says that as well. thankful to the fans, great leadership in the area and keep playing well in the pitch and are responsive to the fans. >> we had a couple weeks ago, admitting a mea culpa, i didn't think they'd succeed in soccer, but said i was wrong, kicking butt. moving to retail, if we can. >> okay, sure. >> you're a retail legend. few people in the world know as much about retail as you. when i hear more superstores and see thousands of other stores going away, sports authority going away, what makes you confident this continues to grow? >> look at the 30 stores we have, they are not traditional golf stores. they are big. the home depot, if you will, the
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large box stores, tremendous amounts of product in there, hard line side, stark line side, and most important thing we offer is great customer experience. talk about simulators, six to in every store. we give golf lessons, there's 11 12,000 to practice, and we do a variety of things to ensure associates are knowledgeable, custom fittings, they fit properly, whatever the handicap is, you walk out of the store being great and have a wow factor. it's a store of 50,000 square feet and adding stores at throe to five a year, which will add about another million square feet of stores in the next five years. the only golf retail is expanding. >> all the touches enough to make the business amazon-proof? who is to say they won't go
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there, use the store's experts and go online and buy the same set of clubs? >> well, you know, they can, but usually, people come in, and they want the experience, they want the socialization with nolg knowledgeable, and the hands-on fraternity, if you will, between men, women, what's going on in our stores is very, very important. i think, sure, can you buy stuff online? you can. new technology coming out all the time of the you want to be fitted all the time whether it's from the clubs, new soft lines or balls, whatever the case may be. that's truly not available through technology. i'm a believer of technology. we certify customers that way as well, but the unique experience, i think, of fitting and being connected to what the customers are looking for in our industry is very, very important, and the fun part of it. it's important for kids to be active in golf these days, and
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get over 3,000 golf clinics a year in the store across the country, and it's a way to help grow the game. in fact, it's about being good to the average golfer with how do you grow the game, in terms of gender, diversity, and every perspective. that's very important to our business. a lot of what the commissioner talked about this morning. >> you nailed the point that dif yennuat differentiates you. they want clubs made for them, height, swing speed, and so on and so forth. >> exactly. >> this is a story with a gentleman i'm sure you know, had an amazing project, a great, great human being, and the reason i thought of it because you talked about getting golf into areas in cities and elsewhere where it's not been a big sport. how do you do that? >> i think using tom as an example, obviously, he developed
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not only a great club, but he developed and fostered the first program at addys lake. we're a national member of east lake. i'm on the national board, a contributor, $3 million in the first year, and it's not the state teaching the folks about golf, but it's important they teach about life lessons, about, you know, how to live in a productive, healthy way, and i think that's the beauty of all our businesses, giving back in a variety of ways, beyond our family foundation, and that's one of the ways we appreciate superstores. we connect to the communities across the nation by being active in the local chapters. tom has done a fabulous job and connects with what the commissioner now, this morning, expansion extension i should say, the fedex tournament in atlanta at east lake for another ten years. tom made that a magnificent home and, actually, i announce once a
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year during the tournament. i usually get a saturday morning or depending the nfl schedule, sometimes a sunday. >> they have the best food item i've ever had at east lake. i think it was a potato chips with blue cheese or something. it was beyond -- >> yes, it's special. >> beyond belief. >> yeah, yeah. >> tell us about the new stadium. everyone's excited about it. leaving the old one. >> right. >> opens for this upcoming season, tell us about it. >> well, it's 2 million square feet, and that's the least exciting thing about it. it's going to be the finest sports entertainment complex in the united states, and easy for me to say that as the owner, but importantly, other people who study stadiums across the country and world believe that. it's going to have a halo score board that's six stories high, 1100 feet around, and there's a magnificent roof that opens and closes in 7-10 minutes. has, you know, millions of square feet of activity.
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fan friendly pricing on concessions, food, et cetera. all of these things make a difference. most important thing beyond the architecture, construction, and design is when fans come in, they have a great customer experience. >> looks great, arthur, thank you. >> thank you. >> arthur blank. thank you for watching "power lunch." >> "closing bell" starts right now. ♪ >> i wonder what fan-friendly pricing is. >> especially at a movie theater too. amc, talk to them about that. >> they'll be on the show today, thank you, bill. welcome to the show, i'm kelly evans. >> making me bill griffeth. another milestone for apple, closing with a market valuation above $800 billion for the first time ever. up 72 cents now. look at whether the tech sectors are overheating nowr

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